Justia Arbitration & Mediation Opinion Summaries

JustAnswer LLC (JustAnswer) appealed an order denying its petition to compel arbitration. Tina Sellers and Erin O’Grady (together, Plaintiffs) used the JustAnswer website to submit a single question to an “expert” for what they believed would be a one-time fee of $5, but JustAnswer automatically enrolled them in a costlier monthly membership. After discovering additional charges to their credit cards, Plaintiffs filed a class action lawsuit against JustAnswer, alleging it routinely enrolled online consumers like them in automatic renewal membership programs without providing “clear and conspicuous” disclosures and obtaining their “affirmative consent” as mandated by the California Automatic Renewal Law. Seeking to avoid the class action litigation, JustAnswer filed a petition to compel individual arbitration, claiming Plaintiffs agreed to their “Terms of Service,” which included a class action waiver and a binding arbitration clause, when they entered their payment information on the website and clicked a button that read, “Start my trial.” In a case of first impression under California law, the Court of Appeal considered whether, and under what circumstances, a “sign-in wrap” agreement was valid and enforceable. The Court concluded the notices on the “Start my trial” screens of the JustAnswer website were not sufficiently conspicuous to bind Plaintiffs, because they were less conspicuous than the statutory notice requirements, and they were not sufficiently conspicuous under other criteria courts have considered in determining whether a hyperlinked notice to terms of services was sufficient to put a user on inquiry notice of an arbitration agreement. The Court therefore affirmed the trial court’s order denying JustAnswer’s petition to compel arbitration. View "Sellers v. JustAnswer LLC" on Justia Law

The Alabama Space Science Exhibit Commission d/b/a U.S. Space & Rocket Center ("ASSEC") filed suit against Space Race, LLC ("Space Race"), seeking to avoid an arbitration award entered in favor of Space Race and against ASSEC by an arbitration panel in New York. In July 2016, Space Race agreed to produce an animated series for ASSEC aimed at promoting the interest of children in space exploration and science. The series was to be created and released to the public over a three-year period. In exchange, ASSEC agreed to compensate Space Race with funds ASSEC would receive from a grant from the National Aeronautics and Space Administration ("NASA"), which had contracted with ASSEC to provide funding for the series. The compensation was to be paid to Space Race annually as the series episodes were created during the three-year contract term. The parties' agreement provided that it "shall be governed" by Alabama law. Space Race produced the series before the contract term expired, but ASSEC failed to pay the amount owed for the last year of the series. Space Race claimed that ASSEC still owed Space Race approximately $1.3 million when the contract term expired. The parties' agreement contained an arbitration provision. In December 2017, after being notified by ASSEC that it would no longer make payments to Space Race because the grant from NASA had been terminated, Space Race commenced arbitration proceedings against ASSEC in New York. Space Race moved to dismiss ASSEC's Alabama action, asserting that a New York court had already entered a final judgment confirming the arbitration award. The Alabama trial court denied Space Race's motion to dismiss, and Space Race petitioned the Alabama Supreme Court for a writ of mandamus directing the trial court to dismiss ASSEC's action. Because the New York judgment confirming the arbitration award against ASSEC was entitled to full faith and credit and res judicata effect, the Supreme Court granted Space Race's mandamus petition. The trial court was directed to vacate its order denying Space Race's motion to dismiss and to enter an order granting that motion. View "Ex parte Space Race, LLC." on Justia Law

The Ninth Circuit reversed the district court's order dismissing a putative class action complaint and granting defendant's motion to compel arbitration pursuant to the Federal Arbitration Act (FAA). Plaintiff contends that the arbitration agreement upon which DHIM relies was not properly formed.The panel agreed with its sister circuits and held that parties cannot delegate issues of formation to the arbitrator. In this case, where plaintiff challenged the very existence of an agreement to arbitrate, the district court was required to address his challenge and determine whether an agreement existed. If no agreement to arbitrate was formed, then there is no basis upon which to compel arbitration. The panel also concluded that the mutual arbitration agreement, as drafted, describes and governs a relationship between plaintiff and D.R. Horton that does not exist, and thus does not constitute a properly formed agreement to arbitrate. Accordingly, the panel remanded for further proceedings. View "Ahlstrom v. DHI Mortgage Co." on Justia Law

The Court of Appeal concluded that the arbitration clause between a job applicant and her prospective employer does not apply to disputes between the applicant and her former employers based on the existence of a business relationship between the prospective employer and the applicant's past employers. Therefore, the arbitration agreement between plaintiff and Expert Staffing West does not apply to disputes arising between her and her former employers. In this case, the court agreed with the trial court that the arbitration agreement between plaintiff and Expert Staffing West did not apply to plaintiff's claims against Essential Seasons and Cool-Pak. Accordingly, the court affirmed the judgment. View "Garcia v. Expert Staffing West" on Justia Law

The DC Circuit affirmed the district court's grant of Tatneft's petition to confirm and enforce its arbitral award against Ukraine. The court agreed with the district court's decision rejecting Ukraine's arguments that the court should have declined to enforce the award under The Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), and should have dismissed the petition on the basis of forum non conveniens. In this case, the enforcement of the arbitral award should not have been denied under the New York Convention arti. (V)(1)(C) where the district court neither exceeded its discretion nor made legal error when it denied Ukraine's motion for supplemental briefing, made years after the parties had initially briefed the merits; Ukraine can pay the $173 million judgment without risking a collapse; the district court did not exceed its authority under the New York Convention; and the court rejected Ukraine's contention that the district court mistakenly enforced the award in spite of the public policy and improper composition exceptions. Furthermore, the court has squarely held that forum non conveniens is not available in proceedings to confirm a foreign arbitral award because only U.S. courts can attach foreign commercial assets found within the United States. View "Tatneft v. Ukraine" on Justia Law

Appellants, two individuals who have traveled on Amtrak in connection with their work and expect to continue doing so, sought declaratory and injunctive relief to prevent Amtrak from imposing an arbitration requirement on rail passengers and purchasers of rail tickets.The DC Circuit affirmed the district court's dismissal of the complaint because appellants have not plausibly alleged an actual injury-in-fact and therefore lack Article III standing. In this case, appellants have alleged neither ongoing nor imminent future injury. Rather, appellants assert only one cognizable interest, the interest in purchasing tickets to travel by rail, but Amtrak's new term of service has not meaningfully abridged that interest. View "Weissman v. National Railroad Passenger Corp." on Justia Law

In a putative class action by Domino’s drivers, asserting violations of various California labor laws, the district court denied a motion to compel arbitration based on its finding that the drivers were a “class of workers engaged in foreign or interstate commerce,” and were exempt from the Federal Arbitration Act (FAA), notwithstanding their contracts with Domino’s, which provided claims between the parties be submitted to arbitration under the FAA. The exemption applies if the class of workers is engaged in a “single, unbroken stream of interstate commerce” that renders interstate commerce a “central part” of their job description.The Ninth Circuit affirmed, rejecting Domino’s argument that the drivers who delivered goods to individual Domino’s franchisees in California were not engaged in interstate commerce because the franchisees, all located in California, placed orders with the supply center in the state, and the goods delivered were not in the same form in which they arrived at the supply center. Domino’s was directly involved in the procurement and delivery of interstate goods, was involved in the process from the beginning to the ultimate delivery of the goods, and its business included not just the selling of goods, but also the delivery of those goods. The transportation of interstate goods on the final leg of their journey by the Domino’s drivers satisfied the requirements of the residual clause. View "Carmona v. Domino's Pizza, LLC" on Justia Law

Plaintiff (K.D.) was a resident at Muirwoods when she suffered falls, resulting in a fractured hip and deteriorating health. She became bedbound and was allegedly left in unsanitary conditions and infected with scabies. Muirwoods alleged that K.D.’s daughter Tennier, signed an arbitration agreement pursuant to her authority to make health care decisions for K.D. when assisting in her placement at Muirwoods. The arbitration provision included a delegation clause providing that an arbitrator would decide whether a claim or dispute must be arbitrated. The clause specified that the agreement to arbitrate could be withdrawn within 30 days and that “agreeing to arbitration is not a condition of admission to the Community.”The court of appeal affirmed the denial o the motion to compel arbitration. The initial determination of whether Tennier was authorized to agree to arbitration on K.D.’s behalf is one for the court, not the arbitrator. Tennier was not K.D.’s agent for purposes of binding her to arbitration. Because the arbitration provision was optional, with its own signature line, it was essentially a separate agreement, Muirwoods did not establish that Tennier, who did not act pursuant to a durable power of attorney or similar authorization, could bind K.D. to an arbitration agreement as part of authorizing her admission. View "Theresa D. v. MBK Senior Living LLC" on Justia Law

The First Circuit reversed the judgment of the district court requiring the parties to arbitrate their dispute in this case, holding that the district court erred in compelling arbitration.In 2000, Air-Con signed a written distribution agreement with Daikin Industries, LTD to be an authorized distributor in Puerto Rico of air conditioning and refrigeration equipment. The agreement contained an arbitration provision requiring the parties to arbitrate any disputes in Japan. Also in 2000, Air-Con established a distribution relationship with Daikin Applied Latin America, LLC, Daikin Industries' subsidiary. In 2018, Air-Con filed suit against Daikin Applied seeking injunctive relief and damages under Puerto Rico's Dealer Protection Act. After the case was removed to federal court Daikin Applied filed a motion to compel arbitration, arguing that the written agreement between Air-Con and Daikin Industries governed Daikin Applied's relationship with Air-Con. The district court agreed with Daikin Applied. The First Circuit reversed, holding that the district court erred in concluding that Air-Con agreed to arbitrate the claims at issue in this case. View "Air-Con, Inc. v. Daikin Applied Latin America, LLC" on Justia Law

The Supreme Court affirmed the decision of the court of appeals affirming the judgment of the district court compelling arbitration in this suit alleging breach of contract and breach of the covenant of good faith and fair dealing, holding that there was no error.Three doctors, including Lisa Pasquarello and John Artz, formed a limited liability company for their veterinary clinic and adopted an operating agreement that contained an arbitration clause. When Pasquarello tried to sell her portion of the practice to Artz through an oral agreement and the sale failed, Pasquarello brought this lawsuit against Artz. The district court compelled arbitration, concluding that the claims fell under the arbitration clause in the operating agreement. The court of appeals affirmed. The Supreme Court affirmed, holding (1) each of Pasquarello's claims related to the enforcement or interpretation of the operating agreement; and (2) therefore, court of appeals correctly held that the district court properly compelled arbitration. View "Hitorq, LLC v. TCC Veterinary Services, Inc." on Justia Law